Rep. Maxine Waters, other lawmakers want hearing on Facebook's Libra cryptocurrency
Rep. Maxine Waters requested Tuesday that Facebook halt the development of its new cryptocurrency Libra until it undergoes congressional and regulatory review. "I am requesting that Facebook agree to a moratorium on any movement forward on developing a cryptocurrency until Congress and regulators have the opportunity to examine" potential risks, the California Democrat said in a statement.
Waters is the chairwoman of the House Committee on Financial Services.
"With the announcement that it plans to create a cryptocurrency, Facebook is continuing its unchecked expansion and extending its reach into the lives of its users," Waters said. "The cryptocurrency market currently lacks a clear regulatory framework to provide strong protections for investors, consumers, and the economy." Waters said Facebook's move should be a "wake-up call" to regulators, who should closely examine the "privacy and national security concerns, cybersecurity risks, and trading risks that are posed by cryptocurrencies."
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In her statement, she also requested Facebook executives appear before the House Committee on Financial Services and provide testimony on these concerns.
There seems to be bipartisan support for an inquiry into Libra.
Rep. Patrick McHenry, a North Carolina Republican who is the ranking member of the House Committee on Financial Service, issued a letter to Waters earlier Tuesday requesting a hearing on Facebook's new digital currency to explore its "potential unprecedented impact on the global financial system."
"While there is great promise for this new technology in fostering financial inclusion and faster payments, particularly in the developing world, we know there are many open questions to the scope and scale of the project and how it will conform to our global financial regulatory framework," McHenry said in his letter.
Earlier, the senior Democrat on the Senate Banking Committee said Facebook's new digital currency will give the tech giant unfair competitive advantages in collecting data on financial transactions as well as control over fees. Sen. Sherrod Brown of Ohio said, "Facebook is already too big and too powerful."
A Facebook spokesperson told FOX Business, "We look forward to responding to lawmakers' questions as this process moves forward."
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Mark Zuckerberg’s company announced on Tuesday the creation of Calibra, a subsidiary that will oversee Facebook's interests in Libra, including a digital wallet for the new cryptocurrency. Rather than exercise direct control over Libra, Facebook will partner with investors such as Visa, PayPal and Uber as members of the Libra Association, an independent entity that will manage the cryptocurrency.
The digital wallet will be available in Messenger, WhatsApp and as a standalone app. It is expected to launch in 2020, according to a company statement.
Facebook is already under federal investigation over its privacy practices, and along with other technology giants also faces a new antitrust probe in Congress.
Creating its own globe-spanning currency — one that could conceivably threaten banks, national currencies and the privacy of users — isn't likely to dampen regulators' interest in Facebook.
FOX Business' Thomas Barrabi and the Associated Press contributed to this report.